It is a matter of "serious concern" that Mr Hayman misled senior officers and the public, the Independent Police Complaints Commission (IPCC) said.

His boss, Metropolitan Police Commissioner Sir Ian Blair, escaped serious criticism, but was accused of being "almost totally uninformed" of events following the death of Jean Charles de Menezes on July 22 2005.

Even off-duty officers at a cricket match heard rumours that the victim was a Brazilian unconnected to terrorism before the Commissioner, the report said.

The family of Mr de Menezes, a 27-year-old Brazilian electrician, branded Scotland Yard "not fit for purpose" in the wake of the damning report. Relatives said it was "unbelievable" Sir Ian did not know that an innocent man had been killed that day.

Mr de Menezes's cousin Alessandro Pereira said: "This report shows that the police were a shambolic mess and that senior officers should be held to account. We have had to wait for two years and it is so painful to hear that senior officers deliberately lied. This is a damning report and it must be acted upon."

The IPCC found "serious weaknesses" in how the Metropolitan Police handled critical information following the shooting at Stockwell Tube station. A report, dubbed Stockwell Two, revealed confusion among senior officers as the force struggled to cope with the aftermath of the fatal shooting.

The death took place as the Metropolitan Police was already stretched to the limit hunting for wanted suicide bombers and investigating the murderous July 7 attacks.

The report focused on who knew what and when after the shooting as a result of a complaint by the de Menezes family that the force released inaccurate information. Sir Ian said he was sorry for the shortcomings the report highlighted in his force but said he was pleased it cleared him of lying.